The banking subsidiary of Swiss retail giant Migros expanded its client base thanks to the acquisition of the Cumulus credit card. An increase in operating costs limited profit growth. 

Migros Bank now has over one million customers, it announced Tuesday as part of its 2022 annual results. Profit was on par with the previous year at 240.5 million Swiss francs after investments in the company's digital transformation and allocations to the Migros Group pioneer fund.

Credit Card Business

As reported by finews.com, Migros Bank had taken over the Cumulus credit card, previously issued by Cembra Money Bank in cooperation with Migros. It is the most widely used credit card in Switzerland, and since July, Migros Bank has been the card's issuer.

A closer look at customer figures shows there is more potential to attract Cumulus card customers. Compared to the end of 2021, the bank gained 211,500 customers across all lines of business, compared to the approximately 850,000 holders of the Cumulus credit card before the takeover. Since credit card contracts run for several years, the transition may not yet be complete, and it is also competing with Cembra which is trying to retain former Cumulus cardholders.

Challenging Anniversary Year

Migros Bank earned more across the board in its various divisions. A 6.4 percent increase in net interest income was lower than the growth in loans as the bank increased the interest it pays on customer deposits. Commission business income increased by 8.9 percent to 126 million francs, with a decline in custody account values. Including other ordinary income, operating income totaled 703 million francs, 7.8 percent more than the previous year. This was tempered by increased operating expenses which increased almost twice as fast by 13 percent to 386.7 million francs.

Migros Bank will celebrate its 65th anniversary in 2023. The general conditions in the anniversary year will remain challenging, as it cautioned on Tuesday. Against this backdrop, the bank expects solid growth and annual results in line with the previous year.